Have i paid too much tax?

purpleaki

Hello,

I am in a confusing situation and this stuff is over my head. I received a letter from the HMRC saying i have underpaid tax for 2018/19. only £200 but thought this was odd because if anything i thought i had overpaid.

Now i left an employer at March 2018 but received a payslip in June 2018 because i received a bonus. I held a small amount of shares too that were subject to tax because i hadn't held them long enough. The payslip reads:

Tax Code OT

Payments
Share payment + £3,047.62
Share Adjustment - £3,047.62
Bonus + 1,945.26


Deductions

Tax paid £1,421.80
NIC £169.62
Share Offset - £774.51

Total Deductions = 816.91


Year to Date
Taxable Pay = £4,997.55

Now, i never received a payment for my shares - nor was i expecting one - i still hold them a the value of £3,047.62 - £774.51.

What is confusing me is, why is my taxable pay is £4,997.55? Is this correct? Should it not just be the bonus payment? Because i have already been taxed on the shares that were transferred to me why is the 3 grand odd appearing in this figure?

The total return from my old employer is:

Taxable Income Income Tax Paid Nat Ins
15 May 2018 4.57 0.80 0.00
15 June 2018 4,992.98 1,421.80 169.62
13 July 2018 400.00 80.00 28.56

Total 5,397.55 1,502.60 198.18

The only (gross) payments i actually received was the £4.57 in May, The 1.9k bonus in June and the £400 in August. That's why this £5.3k total feels odd

I have spoken to the share company and my old employer and i am stuck in the middle. I do not know what is right here - just that it feels wrong - and whether i am explaining my query well enough to them.

Any help on whether this looks right or wrong would be greatly appreciated

Apologies on the formatting on the numbers it seems to have gone weird

Dazed_and_confused

You start talking about £200 tax you apparently owe for the 2017:18 tax year.

The rest of your thread, and all the detailed figures, is about things that happened during the 2018:19 tax year.

What exactly are you asking for help with

If it is the £200 you seem(?) to disagree with then you need to provide more information about the 2017:18 tax year.

purpleaki

Sorry sorry sorry it is all 2018/19. Schoolboy error in the first paragraph.

Have updated

Dazed_and_confused

Ok, so what have you received from HMRC showing you owe £200?

Can you provide the breakdown of the calculation?

davidwatts

On the face if it there could be a simple error on the June payslip in terms of the "share payment" being included in the total but the "share adjustment" not being deducted. That would certainly make the totals tally with what you seem to be saying.

That said, I know nothing about tax on shares in these circumstances; what do you mean when you say you were already taxed on the shares?

purpleaki

Full breakdown

Employer 1

Income = £10,473.33
Tax = £1304.00

Employer 2 (the one which i have the query over)

Income = £5,597.55
Tax = £1,502.60

Employer 3

Income = £33,167.31
Tax = £4,968.80

Total

Income = £49,038.19
Tax = £7,775.40

Personal Allowance - £11,850
Taxable Income = £37,188.19

20% Rate Income = £34,500. Tax = £6,900
40% Rate Income = £2,688. Tax = £1,075.20

Total Tax Payable = £7,975.20
Tax Paid = £7,775.40

I owe - £199.80

---

Now i can well imagine them sums are correct based on the information HMRC has been provided. What i am disputing is whether the £3,047.62 mentioned above should have been included in my taxable pay

That said, I know nothing about tax on shares in these circumstances; what do you mean when you say you were already taxed on the shares?

I had £3,047.62 in shares when i left the company. As i hadn't been in the scheme long enough they were subject to tax. So £774.51 was taken from the value from the shares, the value is now around the the £2.3k as expected.

I still hold those shares, i have never received a payment for any amount. And this is where my query is, that £3,047.62 forms part of the £5,397.55 taxable income for Employer 2. This is what - to my very untrained eye - looks wrong.

Hope i have explained that a bit better and appreciate you looking at my posts :beer:

eskbanker

purpleaki wrote: »

I had £3,047.62 in shares when i left the company. As i hadn't been in the scheme long enough they were subject to tax. So £774.51 was taken from the value from the shares, the value is now around the the £2.3k as expected.

I still hold those shares, i have never received a payment for any amount. And this is where my query is, that £3,047.62 forms part of the £5,397.55 taxable income for Employer 2. This is what - to my very untrained eye - looks wrong.

Surely including the £3,047.62 gross value of the shares in your taxable income is the mechanism via which the £774.51 tax liability is settled? The same-value balancing adjustment shown in your earlier post is then applied to reflect the fact that the employer isn't actually paying you the £3K.

So, starting from that £3K, HMRC have their £774, you have the remaining £2.3K, and no money changes hands as far as the employer is concerned, which all sounds right to me....

davidwatts

Ah, I note that the share offset is listed as a deduction but is a negative amount (-£774.51) so it's actually in your favour (it reduces the total deduction taken from your pay).

The share payment is shown and included in your taxable pay to make sure you pay the tax you owe on the shares. The offset amount is to make sure you are taxed on their current value rather than the higher original value. The share adjustment is to reflect that you are not actually receiving the value of the shares as pay.

So all seems correct in as much as the value of the shares has to be taxed and should be included in your taxable pay and the purpose of the offset is to make sure you are being taxed on the current value of the shares as opposed to the original value.

purpleaki

OK thanks for the explanations Dazed and David, that makes sense to me now.

Cheers